By Imani Moise
NEW YORK, Jan 6 (Reuters) - Asian stocks perked up on
Thursday as investors remained confident that violence in
Washington would not disrupt a legitimate transition to a new
presidency or derail political support for a U.S. economic
recovery.
Wall Street had given up early gains on Wednesday after
supporters of President Donald Trump stormed the legislative
building, disrupting the congressional vote to certify the 2020
presidential election results. However, investors remained defiantly bullish in early Asian
trade with S&P 500 futures up 0.3%, Japan's Nikkei 225 .N225
rising 1.24% and the S&P/ASX 200 .AXJO 1.25% higher.
Supporting sentiment were Democratic wins in two closely
watched U.S. Senate runoff elections in the state of Georgia on
Wednesday, which swung the balance of power in President elect
Joe Biden's favor. Despite earlier worries about the economic
risks of a "blue sweep", expectations for a large fiscal
stimulus package in early 2021 are now pushing markets higher.
Markets analysts also felt that cooler heads will ultimately
prevail despite the ongoing unrest in Washington.
"The mob has interrupted the process of Biden's
confirmation, but the mob will not overturn the process,"
Masafumi Yamamoto, chief currency strategist at Mizuho
Securities in Tokyo said. "The market is optimistic that Biden's
victory will not be overturned," he said, noting that investors
are positioning for a U.S. economic recovery.
World leaders quickly chimed in to condemn the riots, but
also affirmed their trust in U.S. institutions. On Wednesday, the Dow Jones Industrial Average .DJI rose
1.44% and the S&P 500 .SPX gained 0.57%, although the Nasdaq
Composite .IXIC ended 0.61% lower amid concerns that a
Democratic-controlled U.S. government would take aim at big tech
companies.
"Even though we are bearing witness to the markets' keen
knack of ironing itself out quickly, the most important question
now is the sequencing of the Biden policy plan,"
Axi Chief Global Market Strategist Stephen Innes wrote in a
note.
"Hopefully, for investors' concerns, it's in order of
stimulus, infrastructure, and tax changes.
"While Biden could theoretically get the ball rolling and
undo many of the Trump tax cuts for corporations and wealthy
individuals on Day One, I cannot imagine that tax hikes are the
priority number one when the current mandate is to rid the U.S.
of the virus and get the economy roaring again."
MSCI's gauge of stocks across the globe .MIWD00000PUS also
gained 0.45%, but emerging market stocks finished 0.35% lower as
World Bank Group President David Malpass warned many poorer
countries are headed towards default if their debt burdens
aren't adjusted. Bond yields jumped in anticipation of a larger stimulus
package. Benchmark 10-year notes US10YT=RR last fell 24/32 in
price to yield 1.0355%, from 0.955% late on Tuesday.
The dollar index =USD inched 0.086% lower after sinking to
its lowest level in nearly three years, with the euro EUR= up
0.27% to $1.2327.
Oil prices were higher, following Saudi Arabia's decision to
voluntarily cut production and on a drop in U.S. crude
inventories. Brent crude LCOc1 settled up 1.3%, at $54.30 a
barrel, while U.S. crude futures CLc1 settled 1.4% higher at
$50.63.
Spot gold XAU= dropped 1.6% to $1,918.06 an ounce.
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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
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